The Canadian Securities Administrators (CSA) have provided revised guidance on the use of non-GAAP financial measures aimed at ensuring that information disclosure by issuers does not mislead investors. An updated version of CSA Staff Notice 52-306 (Revised) Non-GAAP Financial Measures (Notice 52-306) was published on January 14, 2016 reflecting amendments to IAS 1 Presentation of Financial Statements (IAS 1) regarding additional subtotals presented in financial statements.
Notably, Notice 52-306 recognizes that an issuer’s GAAP may require the presentation of additional subtotals in the financial statements when such presentation is relevant to an understanding of the issuer’s financial position or financial performance as, for example, may be required by paragraphs 55 and 85 of IAS 1. Issuers who wish to include these additional subtotals in a press release or outside of the issuer’s financial statements before the financial statements are filed on SEDAR should explain the subtotals’ composition so as to avoid any confusion. Notice 52-306 states that this may be done by including a copy of the statement containing the additional subtotals or reconciling the additional subtotals to the most directly comparable line item specified or defined by IFRS that will be presented in financial statements. Issuers should also comply with the requirements found in IAS 1 applicable to additional subtotals presented in the statement of financial position and statement of profit or loss and other comprehensive income.
As before, Notice 52-306 includes, among other things, specific guidance to issuers regarding additional GAAP measures required by IFRS and a list of suggested practices to help issuers address obligations in relation to additional GAAP measures. Notice 52-306 was last updated on February 17, 2012.